Supermarket executives have adopted unified market knowledge systems to improve the murky and difficult process of store site selection

My hometown, Dumont, New Jersey, a solidly middle-class town of 20,000 people, is currently at the center of a vicious, years-long turf war. The combatants? Pharmacies.

CVS struck first with a store on Washington Avenue, and then expanded west into New Milford. Walgreens volleyed with stores to the east, and further south in Bergenfield. Then a dark horse emerged, Rite Aid, establishing positions to the heavily trafficked south. Walgreens countered with another location on Washington Avenue, smack in the middle of CVS and Rite Aid territory. It's become Game of Thrones, with pill bottles.

Dumont and its neighboring towns happen to be a gold mine for prescription-fillings. For every square half-mile in the area, residents are filling more than 80,000 prescriptions per year. In Dumont alone, that means there are at least 320,000 prescriptions filled annually. Eighty thousand is a magic number for national pharmacies -- it's the bare minimum required before entering a market. There are eight pharmacies within two miles of Dumont, but the area's annual prescription demand suggests it could support four or five more. This battle will rage on.

I came to learn all this while test-driving TAS Unity, the flagship product of a tech company called Trade Area Systems. TAS Unity is an example of a unified market knowledge system (UMKS), a relatively new technology which large retailers and commercial real estate developers are using to improve the murky process of site selection. Say CVS wants to open yet another store near Dumont. It could use UMKS to help choose its next location.

UMKS is not an overtly sexy product -- it's simply a package of hardware, software, data and Web/mobile apps. But it comes with a compelling value proposition: UMKS can help retailers make better, faster decisions about where to build. Based on the conversations I've had with developers, retailers and researchers in the commercial real estate business, this makes UMKS a very exciting idea.

* * *

Site selection is difficult. It can require thousands of dollars and hundreds of man-hours to simply evaluate a site. Companies take the process very seriously, because poor site selections wind up becoming very costly mistakes. Consider all the expenses involved with opening a store: research, broker fees, property, permits, construction, staff, promotions, marketing. The threat of failure looms over everything: How is a brand affected when a store opens and then closes?

SUPERMARKET FUN FACTS- Supermarkets assume any customer more than 8 minutes away will find their store inconvenient.- 55% of the products in Super Centers (combo discount department and grocery stores) are supermarket items.- 60% of home improvement superstore customers are women.- Supermarkets assume each person spends about $50/week on groceries.

Things weren't always this way. Back in the 1950s, when retailers first started fanning across the United States, site selection was kind of easy. Commercial real estate was a personality-driven business back then, more art than science, filled with men (they were almost all men) who could pick a good spot by the look of the land or the smell of the soil. Dolores Hayden writes in Building Suburbia that Ray Kroc of McDonald's used to cherry-pick locations for his next burger stand by flying over suburbanizing areas in a Cessna.

Thanks to a number of factors, the personal approach proved surprisingly durable. Suburbanization certainly made things easier: new, wide-open markets spawned as urban downtowns were abandoned. The Interstate Highway Act of 1956 was key, as well. It accelerated the development of shopping centers and malls, and created the need for thousands of new roadside businesses.

According to Hayden, a third and less-known factor was perhaps the most important. In 1954, Congress reduced the straight-line depreciation period of greenfield income-producing property from 40 years to seven years. This meant that new commercial properties built on virgin land -- the kind of land readily available in new suburbs -- suddenly became near-instant tax write-offs. (The depreciation rate stands at 39½ years today.) The loophole created huge subsidies for developers and turned commercial real estate development into something like a license to print money.

The gold rush ended after the real estate crash of the late 1980s. The easy money was gone, and the landscape was saturated with commercial properties. The advent of real estate investment trusts, or REITs, made things more complex. Basically conceived as straight-up investment portfolios that contain buildings instead of stocks, REITs forced developers and retailers to more carefully consider return on investment. The situation's even tougher in today's post-recessionary climate. Expense, market saturation, risk aversion and a slowed residential construction industry (new homes spawn new stores) all complicate site selection.

Then there is the problem of data overload. According to Peter Patnaude, head of research at SRS Real Estate Partners, the largest retail real estate services company in the United States, there are "thousands" of potential variables that can be taken into account when choosing a site: age, race, gender, income, credit scores, crime statistics, regional voting records, divorce rates, traffic patterns, loyalty card information and weather just being the teeniest tip of the iceberg.

But the would-be customer is only one part of the equation. Retailers must also have intimate knowledge of their own locations -- no small task when you're talking about thousands of properties -- as well as the locations of their competitors. Some of this information lives in databases, and some of it lives in the heads of people within the companies. This presents another problem. When employees retire or, worse, move to a competitor, they walk away with a tremendous amount of knowledge.

As its name suggests, a unified market knowledge system is designed to aggregate all of this information. Everything a retailer might use to make a site selection decision -- all the data, market research and competitive intelligence -- is loaded onto a server, which can be accessed by anyone involved in the site selection process. Of course, servers have been around forever, and companies like Trade Area Systems and the GIS services provider ESRI have long offered technical solutions to help retailers manage their data. So why is UMKS catching on now?

Eighty thousand is a magic number for national pharmacies -- it's the bare minimum required before entering a market.

According to Mary Lou Fiala, former Chairman of the International Council of Shopping Centers, the advent of mobile technologies, especially the iPad, has been a major catalyst. "It's just changing everything," she says.

Using an iPad, individuals out in the field can not only access information, they can also update incorrect data, add notes about properties or competitor locations and use the iPad's built-in camera and GPS to upload geo-tagged images to the system. The combination of better, more accessible data allows companies to speed up the site selection process. Peter Patnaude says that analysts at SRS are completing research projects that once took days in a matter of hours.

Mapping is another key feature of UMKS. Companies have long used mashups of maps and data to help inform their decisions. One of the most enduring examples of this idea is something known as a ring study. To make a ring study, you start by dropping a pin at a point where you might like to build. Using the pin as your center, you then plot data in relation to the pin. A basic ring study, for instance, might show the number of potential customers living within five, 10 and 15 miles of a potential site. Instead of miles, drive times can be used similarly.

Ring studies are useful tools, but they're only as good as the data upon which they are built. UMKS, in turn, helps companies produce far more accurate and dynamic maps, providing a better picture of the world from the retailer's point of view.

* * *

One thing becomes clear when you look at all the maps and data associated with a site selection: commercial real estate is all about perspective. The same factors that make an area poisonous to one retailer make it ideal for another. Discount retailers, for instance, have been among the few to aggressively expand following the recent recession. These businesses sometimes see opportunity in surprising data, such as low credit scores and high household debt rates.

In this way, it's possible to see retail locations as representations of the communities in which they are built. They're visualizations of demand, manifestations of data. In the case of Dumont, my hometown, the glut of pharmacies paints a certain kind of picture: With an annual prescription demand of 16 per capita, Dumont residents fill far more prescriptions than the average American (11.9). Is this because of an aging population, high rates of access to insurance and medical coverage or simply the fact that people in the area are ... not well? I do know this: there are no retail health clubs in Dumont.

In helping retailers manage data and map demand, UMKS has significant implications for how the business of commercial real estate is conducted. Decisions can be made faster, new markets can be revealed. The question, then, is what do these decisions and markets say about us?

Images: 1. A screenshot of the software shows a ring study; 2. Desire lines, which show where a store has the strongest pull, for Walmarts in the Las Vegas area.

About the Author

Most Popular

Writing used to be a solitary profession. How did it become so interminably social?

Whether we’re behind the podium or awaiting our turn, numbing our bottoms on the chill of metal foldout chairs or trying to work some life into our terror-stricken tongues, we introverts feel the pain of the public performance. This is because there are requirements to being a writer. Other than being a writer, I mean. Firstly, there’s the need to become part of the writing “community”, which compels every writer who craves self respect and success to attend community events, help to organize them, buzz over them, and—despite blitzed nerves and staggering bowels—present and perform at them. We get through it. We bully ourselves into it. We dose ourselves with beta blockers. We drink. We become our own worst enemies for a night of validation and participation.

Even when a dentist kills an adored lion, and everyone is furious, there’s loftier righteousness to be had.

Now is the point in the story of Cecil the lion—amid non-stop news coverage and passionate social-media advocacy—when people get tired of hearing about Cecil the lion. Even if they hesitate to say it.

But Cecil fatigue is only going to get worse. On Friday morning, Zimbabwe’s environment minister, Oppah Muchinguri, called for the extradition of the man who killed him, the Minnesota dentist Walter Palmer. Muchinguri would like Palmer to be “held accountable for his illegal action”—paying a reported $50,000 to kill Cecil with an arrow after luring him away from protected land. And she’s far from alone in demanding accountability. This week, the Internet has served as a bastion of judgment and vigilante justice—just like usual, except that this was a perfect storm directed at a single person. It might be called an outrage singularity.

Most of the big names in futurism are men. What does that mean for the direction we’re all headed?

In the future, everyone’s going to have a robot assistant. That’s the story, at least. And as part of that long-running narrative, Facebook just launched its virtual assistant. They’re calling it Moneypenny—the secretary from the James Bond Films. Which means the symbol of our march forward, once again, ends up being a nod back. In this case, Moneypenny is a send-up to an age when Bond’s womanizing was a symbol of manliness and many women were, no matter what they wanted to be doing, secretaries.

Why can’t people imagine a future without falling into the sexist past? Why does the road ahead keep leading us back to a place that looks like the Tomorrowland of the 1950s? Well, when it comes to Moneypenny, here’s a relevant datapoint: More than two thirds of Facebook employees are men. That’s a ratio reflected among another key group: futurists.

Even when they’re adopted, the children of the wealthy grow up to be just as well-off as their parents.

Lately, it seems that every new study about social mobility further corrodes the story Americans tell themselves about meritocracy; each one provides more evidence that comfortable lives are reserved for the winners of what sociologists call the birth lottery. But, recently, there have been suggestions that the birth lottery’s outcomes can be manipulated even after the fluttering ping-pong balls of inequality have been drawn.

What appears to matter—a lot—is environment, and that’s something that can be controlled. For example, one study out of Harvard found that moving poor families into better neighborhoods greatly increased the chances that children would escape poverty when they grew up.

While it’s well documentedthat the children of the wealthy tend to grow up to be wealthy, researchers are still at work on how and why that happens. Perhaps they grow up to be rich because they genetically inherit certain skills and preferences, such as a tendency to tuck away money into savings. Or perhaps it’s mostly because wealthier parents invest more in their children’s education and help them get well-paid jobs. Is it more nature, or more nurture?

Forget credit hours—in a quest to cut costs, universities are simply asking students to prove their mastery of a subject.

MANCHESTER, Mich.—Had Daniella Kippnick followed in the footsteps of the hundreds of millions of students who have earned university degrees in the past millennium, she might be slumping in a lecture hall somewhere while a professor droned. But Kippnick has no course lectures. She has no courses to attend at all. No classroom, no college quad, no grades. Her university has no deadlines or tenure-track professors.

Instead, Kippnick makes her way through different subject matters on the way to a bachelor’s in accounting. When she feels she’s mastered a certain subject, she takes a test at home, where a proctor watches her from afar by monitoring her computer and watching her over a video feed. If she proves she’s competent—by getting the equivalent of a B—she passes and moves on to the next subject.

The Wall Street Journal’s eyebrow-raising story of how the presidential candidate and her husband accepted cash from UBS without any regard for the appearance of impropriety that it created.

The Swiss bank UBS is one of the biggest, most powerful financial institutions in the world. As secretary of state, Hillary Clinton intervened to help it out with the IRS. And after that, the Swiss bank paid Bill Clinton $1.5 million for speaking gigs. TheWall Street Journal reported all that and more Thursday in an article that highlights huge conflicts of interest that the Clintons have created in the recent past.

The piece begins by detailing how Clinton helped the global bank.

“A few weeks after Hillary Clinton was sworn in as secretary of state in early 2009, she was summoned to Geneva by her Swiss counterpart to discuss an urgent matter. The Internal Revenue Service was suing UBS AG to get the identities of Americans with secret accounts,” the newspaper reports. “If the case proceeded, Switzerland’s largest bank would face an impossible choice: Violate Swiss secrecy laws by handing over the names, or refuse and face criminal charges in U.S. federal court. Within months, Mrs. Clinton announced a tentative legal settlement—an unusual intervention by the top U.S. diplomat. UBS ultimately turned over information on 4,450 accounts, a fraction of the 52,000 sought by the IRS.”

During the multi-country press tour for Mission Impossible: Rogue Nation, not even Jon Stewart has dared ask Tom Cruise about Scientology.

During the media blitz for Mission Impossible: Rogue Nation over the past two weeks, Tom Cruise has seemingly been everywhere. In London, he participated in a live interview at the British Film Institute with the presenter Alex Zane, the movie’s director, Christopher McQuarrie, and a handful of his fellow cast members. In New York, he faced off with Jimmy Fallon in a lip-sync battle on The Tonight Show and attended the Monday night premiere in Times Square. And, on Tuesday afternoon, the actor recorded an appearance on The Daily Show With Jon Stewart, where he discussed his exercise regimen, the importance of a healthy diet, and how he still has all his own hair at 53.

Stewart, who during his career has won two Peabody Awards for public service and the Orwell Award for “distinguished contribution to honesty and clarity in public language,” represented the most challenging interviewer Cruise has faced on the tour, during a challenging year for the actor. In April, HBO broadcast Alex Gibney’s documentary Going Clear, a film based on the book of the same title by Lawrence Wright exploring the Church of Scientology, of which Cruise is a high-profile member. The movie alleges, among other things, that the actor personally profited from slave labor (church members who were paid 40 cents an hour to outfit the star’s airplane hangar and motorcycle), and that his former girlfriend, the actress Nazanin Boniadi, was punished by the Church by being forced to do menial work after telling a friend about her relationship troubles with Cruise. For Cruise “not to address the allegations of abuse,” Gibney said in January, “seems to me palpably irresponsible.” But in The Daily Show interview, as with all of Cruise’s other appearances, Scientology wasn’t mentioned.

Some say the so-called sharing economy has gotten away from its central premise—sharing.

This past March, in an up-and-coming neighborhood of Portland, Maine, a group of residents rented a warehouse and opened a tool-lending library. The idea was to give locals access to everyday but expensive garage, kitchen, and landscaping tools—such as chainsaws, lawnmowers, wheelbarrows, a giant cider press, and soap molds—to save unnecessary expense as well as clutter in closets and tool sheds.

The residents had been inspired by similar tool-lending libraries across the country—in Columbus, Ohio; in Seattle, Washington; in Portland, Oregon. The ethos made sense to the Mainers. “We all have day jobs working to make a more sustainable world,” says Hazel Onsrud, one of the Maine Tool Library’s founders, who works in renewable energy. “I do not want to buy all of that stuff.”

Two hundred fifty years of slavery. Ninety years of Jim Crow. Sixty years of separate but equal. Thirty-five years of racist housing policy. Until we reckon with our compounding moral debts, America will never be whole.

And if thy brother, a Hebrew man, or a Hebrew woman, be sold unto thee, and serve thee six years; then in the seventh year thou shalt let him go free from thee. And when thou sendest him out free from thee, thou shalt not let him go away empty: thou shalt furnish him liberally out of thy flock, and out of thy floor, and out of thy winepress: of that wherewith the LORD thy God hath blessed thee thou shalt give unto him. And thou shalt remember that thou wast a bondman in the land of Egypt, and the LORD thy God redeemed thee: therefore I command thee this thing today.

— Deuteronomy 15: 12–15

Besides the crime which consists in violating the law, and varying from the right rule of reason, whereby a man so far becomes degenerate, and declares himself to quit the principles of human nature, and to be a noxious creature, there is commonly injury done to some person or other, and some other man receives damage by his transgression: in which case he who hath received any damage, has, besides the right of punishment common to him with other men, a particular right to seek reparation.

An attack on an American-funded military group epitomizes the Obama Administration’s logistical and strategic failures in the war-torn country.

Last week, the U.S. finally received some good news in Syria:.After months of prevarication, Turkey announced that the American military could launch airstrikes against Islamic State positions in Syria from its base in Incirlik. The development signaled that Turkey, a regional power, had at last agreed to join the fight against ISIS.

The announcement provided a dose of optimism in a conflict that has, in the last four years, killed over 200,000 and displaced millions more. Days later, however, the positive momentum screeched to a halt. Earlier this week, fighters from the al-Nusra Front, an Islamist group aligned with al-Qaeda, reportedly captured the commander of Division 30, a Syrian militia that receives U.S. funding and logistical support, in the countryside north of Aleppo. On Friday, the offensive escalated: Al-Nusra fighters attacked Division 30 headquarters, killing five and capturing others. According to Agence France Presse, the purpose of the attack was to obtain sophisticated weapons provided by the Americans.